Malaysia may suspend palm oil exports to the EU

• Malaysia may halt selling palm oil to the European Union.
• Environmental groups accuse the palm oil sector.
• The EU is a significant importer of palm oil.

Malaysia said on Thursday that it may halt selling palm oil to the European Union in reaction to a new EU regulation that closely regulates the product’s sale in order to safeguard forests.

Malaysia and Indonesia have agreed to review a controversial law banning the sale of palm oil and other products linked to deforestation, Malaysia’s agriculture ministry has said.

The EU is a significant importer of palm oil, and the rule, agreed upon in December, has sparked outrage in Indonesia and Malaysia, the primary producers.

Fadillah told reporters on the sidelines of a seminar on Thursday.”If we need to engage experts from overseas to counter whatever move by the EU, we have to do it,”

“Or the option could be we just stop exports to Europe, just focus on other countries if they (the EU) are giving us all a difficult time to export to them.”

Environmental groups accuse the palm oil sector for the widespread destruction of Southeast Asian rainforests, despite the fact that Indonesia and Malaysia have made sustainability certification essential for all operations.

Fadillah, who is also the deputy prime minister, encouraged members of the Council of Palm Oil Producing Countries (CPOPC) to unite against the new regulation and to resist “baseless claims” about the sustainability of palm oil made by the EU and the US.

CPOPC, which is led by Indonesia and Malaysia, has previously accused the EU of unfairly targeting palm oil.

In response to Fadillah, the EU’s ambassador to Malaysia stated that the country’s palm oil imports were not prohibited and that the EU’s deforestation regulation did not impose impediments to Malaysian exports.

“(The rule) applies equally to commodities produced in any country, including EU member states,” EU Ambassador Michalis Rokas told Reuters.

Demand from EU

Even before the new regulation was passed, EU demand for palm oil was predicted to fall dramatically over the following ten years. Because of their perceived link to deforestation, palm-based transportation fuels were ordered to be phased out by 2030 by an EU renewable-energy directive in 2018.

Separate claims have been filed with the WTO by Indonesia and Malaysia, claiming that the provision of the fuel is discriminatory and constitutes a trade barrier.

This week, Indonesian President Joko Widodo and Malaysian Prime Minister Anwar Ibrahim agreed to “combat palm oil prejudice” and expand collaboration through CPOPC.

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